BP Reportedly in Talks to Sell Alaska Oil Field

Saturday, Jul 10, 2010  |  Updated 11:45 PM PDT
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BP Reportedly in Talks to Sell Alaska Oil Field

ASSOCIATED PRESS

Beleaguered oil giant BP is in talks to sell $12 billion of assets, including a prized Alaskan oil field, says Sunday Times of London.

LONDON - BP is in talks to sell up to $12 billion of assets, including its big stake in Alaska’s Prudhoe Bay, the largest oil field in North America, The Sunday Times of London reported.

A sale would be the latest of several steps the beleaguered oil giant is taking to raise money to pay for damages from the disastrous oil spill in the Gulf of Mexico, the Times said.

BP has entered talks with American rival Apache Corp., which approached the British company, the Times said. Negotiations are under way over the structure of the agreement and what other assets could be included, it said.

Houston, Texas-based Apache describes itself as an independent energy company in exploration and development of natural gas and crude oil. The firm operates in the United States, Canada, Egypt, Australia, North Sea and Argentina. Apache is worth $30 billion and is one of America's largest independent oil groups, according to Reuters. Apache reported first-quarter earnings of $705 million on revenue of $2.7 billion. Its shares closed Friday up 48 cents at $87.88.

Word of the BP talks comes as the company is trying to install a tighter seal over the leaking Gulf well, which has been pouring oil since a blowout in April, the Times said. A relief well that may close it off could be complete before the end of the month.

The Times said good news from the Gulf coupled with BP's depressed stock price could tempt rivals to consider bids.

BP’s shares finished on Friday at $34.05, just over half of its 52-week peak.

Besides selling assets, BP is raising billions from bond issues and bank loans, the Times said.

The cash will help to reassure investors that the cost of the cleanup will not overwhelm the company, the Times said. Goldman Sachs, the American investment bank, thinks BP could ultimately be forced to pay $70 billion in cleanup and compensation costs.

Getting a stake in Prudhoe Bay would be a coup for Apache, the Times said. It is one of the largest oil fields discovered and one of BP’s prize assets. It produces 390,000 barrels a day, equivalent to 15 percent of the United Kingdom's North Sea output.

BP’s partners in the field, Exxon and Conoco Philips, are likely to have pre-emption rights that would allow them to match any offer made by Apache, the Times said.

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